New Treasury Rules Would Rein In Nonprofits’ Political Role

In a much needed move, the Department of the Treasury and the IRS have issued proposed rules that would limit the political activities of supposed non-profits which have made a mockery of the provisions of Section 501(c)(3) which bars political activity by entities treated as non-profit charities.  While entities of both sides of the political spectrum have abused the rules, few do so more than the self-labeled "family values" organizations which receive taxpayer subsidies even as they engage in political activities that seek to disenfranchise citizens and disseminate hatred towards other citizens. It is long past time that these organizations either stay out of politics or give up their tax-exempt status.  Here are highlights from the New York Times on the proposed rules:

The Obama administration on Tuesday moved to curb political activity by tax-exempt nonprofit organizations, with potentially major ramifications for some of the biggest and most secretive spenders in American politics. 

New rules proposed by the Treasury Department and the Internal Revenue Service would clarify both how the I.R.S. defines political activity and how much nonprofits are allowed to spend on it. The proposal covers not just television advertising, but bread- and-butter political work like candidate forums and get-out-the-vote drives. 

Long demanded by government watchdogs and Democrats who say the flow of money through tax-exempt groups is corrupting the political system, the changes would be the first wholesale shift in a generation in the regulations governing political activity by nonprofits. 

[T]he proposal also thrusts the I.R.S. into what is sure to be a polarizing regulatory battle, with some Republicans immediately criticizing the proposal on Tuesday as an attack on free speech and a ploy to undermine congressional investigations into the agency’s handling of applications from Tea Party groups. 

Political spending by tax-exempt groups — from Crossroads Grassroots Policy Strategies, co-founded by the Republican strategist Karl Rove, to the League of Conservation Voters — skyrocketed to more than $300 million in 2012 from less than $5.2 million in 2006, according to the Center for Responsive Politics. 

Much of the money has been funneled through chains of interlinked nonprofit groups, making it even harder to determine the original source. 

And unlike political parties and “super PACs,” political nonprofits are permitted to keep the names of donors confidential, making them the vehicle of choice for deep-pocketed donors seeking to influence campaigns in secret. 

[T]he I.R.S. proposal could have an enormous impact on some of the biggest groups, forcing them to either limit their election spending or register as openly political organizations, such as super PACs. 

[U]nder the new proposal, a broad swath of political work would be classified as “candidate-related political activity” and explicitly excluded from the agency’s definition of social welfare. Those activities include advertisements that mention a candidate within 60 days of an election as well as grants to other organizations making candidate-related expenditures. 

Distributing voter guides, for example, would automatically count as political activity.

Expect plenty of shrieking and flying spittle from the far right in particular and "family values" hate groups like FRC and NOM.